Ethical Business Practices
Robert Haas and Milton Friedman are both renowned authors of the 20th century. Their writings were business oriented. Haas was the chairperson of Levi Strauss and Co. while Milton Friedman was an economist and statistician. This paper is going to discuss their writings and perspectives regarding ethical business practices.
According to Robert Haas, running a business ethically results in its profitability in the long term. The worldview of business ethics has greatly changed over the years, previously, most companies viewed business ethics simply in light of administrative fulfillment with legal standards and observation of internal rule and regulations. This is illustrated by the fact that many companies are now seeking to adopt ethical business practices and want to do business with organizations that follow ethical guidelines. The situation has gradually changed over time as more attention is now being paid to business principles. It is important for companies to earn the loyalty of their customers; customer loyalty is important because it leads to an increased sales volume as a result of repeat purchases and word-of-mouth advertising. Corporations are frequently requested and encouraged to evaluate their business practices in order to develop and implement legal and ethical business structures in order. Companies are using corporate social responsibility as a tool for enhancing their responsibility and accountability to all their stake holders Ethical business practices can be adopted by all businesses in order to progress corporate citizenship, build consumer confidence and protect trademark value.
In his speech “The title”, Haas views ethical practices as a global business challenge. Following the example of Levi Strauss and Co., he is of the opinion that businesses should use guidelines for working conditions in order to preserve human rights and also act ethically. He also states that working hours should be limited and a schedule of employee off-days should be mandated. With these types of conditions, employees will not be overworked; hence, will have the appropriate energy to work. Haas also argues that the working environment should be safe and healthy for it to be termed as conducive. In addition to this, he says that countries where human rights are violated are not favorable for business growth and that business partners should follow the business law and conduct their business in an ethical way. Ethical business practices are necessary to protect the global brand image of a company and establish a good reputation. Levi Strauss and Co. terminated all business relationships with contactors who failed to abide by their guidelines. Such a consequence is preferable to help acquire a serious business relation.
In order for companies to succeed in their businesses, rules and regulations should be strictly followed, and there should be a consequence regarding every breaking of law. This will ensure that business follow the ethical and legal guidelines. If the company detects any unethical practices, it should come up with positive reinforcement techniques to counter the undesired practices. .For instance, when Levi Strauss and Company discovered that Bangladesh and Turkey used child labor, which was an action against the offered guidelines, a positive consequence, was implemented. The children were taken to school, while they still got their earnings, and finally were employed to the firm when they reached the required age. Implementation of ethical business practices may encounter some obstacles that if creatively navigated, may yield even greater achievements and more recognition for the firm.
Companies working under ethical principles encounter limited options in different situations and the profit margins are squeezed in the near term, but their decisions establish a good reputation for them and invite more shareholders. They accordingly earn more profits in the long run. According to Haas, to follow ethical principles and guidelines is a long-term decision that also provides motivation for the company to achieve its goals. He also states that companies working under ethical and legal guidelines do not squander their investments hence avoid situations that may lead to loss of reputation. At the modern society, compulsive spending in companies is a turn-off for shareholders who view it as a waste of their resources and as a sign of irresponsible management. Companies should implement ethnical practices in order to maintain shareholder confidence and earn a good reputation among shareholders
Different people have contrasting views and perspectives of ethical business practices. According to Milton Friedman, the practice of business ethics restricts the freedom of both the business and the society. Friedman states that a company should not terminate its business relationship with other companies which fail to adhere to its ethical guidelines. It is clear that he is more concerned with defending the companies that do not follow ethical principles. Friedman also complains about authors like Haas because their insistence on implementation of ethical practices interferes with internal matters of other business. His argument is that businesses should be allowed to operate freely, without the interference of external rules and regulations. Friedman refers to authors like Haas as shortsighted. He says that they give speeches on social responsibilities indicating how they are concerned about other people’s affairs, while their main intention is to gain fame (page). This particular situation is portrayed when Haas gives a speech about child labor in Bangladesh and Turkey. Friedman assumes that the objective of Haas’ speech was to enhance the image of Levi Strauss and Company; hence, it was a marketing gimmick.
Friedman states that, “The only corporate social responsibility of business is to generate profits.” Milton’s argument is that businesses engage in corporate social responsibility activities to pursue their own interests. He says that Haas and his associates paid for the children’s’ school fees for their own benefits because they were later employed by Levi Strauss & Company.
Haas and Friedman both have strong argument s and opinions on business ethics and corporate social responsibility. While Haas enforces these principles, Milton opposes them. Friedman views business ethics as a means through which businesses manipulate their stakeholders to increase their revenues. He claims that businesses act in a manner that suggests they are concerned about the stakeholders’ interests more than they are about generating profits, thus enhancing their image. Haas views business ethics as the basic principles of managing a business. According to him, businesses have to be run in a manner that does not harm any of its stakeholders. He stresses that it is important for a business to add value to itself and to its community by adhering to a set code of ethics. Haas’ point of view is superior to Friedman’s viewpoint because all organizations should have a set of rules that governs how it interacts within itself and with its environment. Otherwise, it would not be possible to judge between justness and unjustness, good or bad in business practices